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New York State Takes Action Against Abusive PBM Audits, Grants New Protections to Independent Pharmacies

The recently passed New York State budget bill including sweeping new protections for independent pharmacies facing PBM audits.  The bill, which amends the Public Health Law, requires PBMs, when conducting audits, to accept purchase invoices from a broader range of wholesalers and distributors.  This provision is notable as PBMs frequently refuse to credit invoices from valid wholesalers approved to operate in New York State.Some additional key provisions include:

  • PBMs must now provide considerable notice prior to auditing a pharmacy, including prior notice of the claims to be audited;
  • PBMs are now restrained from auditing a claim once a certain amount of time has passed after adjudication of the claim;
  • PBMs are now limited on the number of prescriptions that can be reviewed under an audit;
  • The new law also imposes deadlines for PBMs to provide pharmacies with preliminary and final audit reports.


The new law is by far the most significant PBM-targeted legislation passed by New York State in recent memory. The additional protections afforded by the law are a welcome change for independent pharmacies facing the constant threat of abusive PBM audits.

If you are in need of expert legal counsel regarding a PBM audit of your pharmacy, do not hesitate to contact our knowledgeable and experienced attorneys in our Audit Practice Group at 212-668-0200 or by email at info@mdrxlaw.com.

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Wednesday, November 21, 2018